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NRAS overview

The National Rental Affordability Scheme (NRAS) is a long term commitment by
the Australian Federal and State governments to investors prepared to build
affordable rental housing. The aim of NRAS is to:

increase the supply of new affordable rental housing;

reduce rental costs for low and moderate income households; and

encourage large scale investment and innovative management of
affordable housing.

The Australian Government is committed to stimulating the construction of
50,000 high-quality homes and apartments. The program targets "middle
Australia" and is not a public housing program. It is a tax-free
financial incentive to encourage private investment in the lower price range of
the residential construction market.

Investing in NRAS

NRAS offers a substantial annual tax-free incentive (the NRAS incentive) for
the duration of the 10 year program. The annual income-tax free Incentive is
currently $10,350, and is indexed each year to the rental component of the
CPI. The Incentive comprises:

$7,763
from the Australian Government per year (as a refundable tax offset or
payment); and

$2,587
from the State Government per year (in direct or in-kind financial
support).

The NRAS Incentive not available to standard residential property
investors. Each NRAS property attracts the incentive for 10 years, so
long as investors continue to comply with conditions relating to tenant
eligibility and rent discounts. Investors must agree to rent approved dwellings
at a rate that is at least 20 per cent below prevailing market rates, to low
and moderate income households.

Benefits of investing in NRAS

NRAS investors can expect to benefit from the annual NRAS Incentive,
rental yields and potential for capital gain.

NRAS is intended to be a commercial, profitable investment for
participants, while also assisting Australia to increase the supply of
affordable housing.

With higher returns on direct residential property than returns on
office or industrial property over the last 10 years, residential
property can be a profitable investment.

NRAS tenants

NRAS tenants tend to be key workers, such as childcare workers, nurses,
police officers, fire-fighters and paramedics. Approximately 1.5 million
households are currently eligible to rent NRAS properties.
Investors can pick any tenants for NRAS properties, as long as these tenants
are within the required income threshold.
Income levels for eligible NRAS tenants are generous and allow for tenant
salary increases of 25 per cent above the entry income limit.